The staff at the Reserve Bank of India has an emotional good bye to governor Raghuram Rajan in a colourful rangoli at the headquarters.
Rajan will demit the office on 4 September after an eventful three-year stint at the central bank. During his tenure, the renowned IMF economist, who had famously warned of the coming 2008 global financial crisis in 2005, took many steps that made him a favourite central banker in the recent times in the country.
First and foremost, he is credited with restoring the credibility of the RBI and its decision making processes by maintaining the autonomous nature of the institution. He fearlessly expressed his opinions about the government policies and other matters related to economy, boosting the standing of the RBI among the global investor community.
He kicked off an exercise to clean up the bank balance sheets, which were burdened with hidden non-performing assets. Notably, the NPAs of the public sector banks have been on the rise of late which is the result of the measures taken by Rajan. Clearly, to address a problem first one need to acknowledge it.
Rajan had also taken the first steps in putting in place an inflation targeting mechanism for the central bank. Soon after he assumed the office, he set up a committee under deputy governor Urjit Patel, who will take over the baton from Rajan on 4 September, to suggest ways to reform the monetary policy framework of the RBI. Inflation targeting was a key recommendation of the committee, which has now been ratified by the government.
In short, while Rajan is stepping down with an unfinished agenda, he has laid a strong framework for his successor to continue his work. No wonder RBI staff has drawn a colourful rangoli on his departure.
As S Gurumurthy tweeted, "RBI chief, not Fed or ECB chiefs can get such memorable, loving symbols".